How does the Renting Homes (Wales) Act 2016 affect employers?
The Renting Homes (Wales) Act 2016 came into law on the 1 December 2022 and will directly affect employers in Wales who provide employees accommodation for their employee as part of their employment contract.
Prior to the new legislation the position was the service occupancy provided by the employer to the employee was either a licence or tenancy. Those employees who lived on site to enable them to undertake the employment duties would have been granted a licence agreement. The licence fell outside of the scope of housing legislation. The employer when terminating the employees’ contract was able to terminate the licence with reasonable notice. Where the accommodation was not essential for the employees position the employee would have had an assured tenancy agreement. In this case the employer would have served a Section 8 notice when the employee contract was terminated.
The above changed on the 1 December 2022. Employees who are given accommodation as part of their employment will fall under the new legislation under the protection of an occupation contract.
An occupation contract will require there to be rent to be paid or other consideration. Some employers may not require rental payments as the employee may be paid a lower wage to reflect the benefit of the accommodation. This arrangement may be deemed as other consideration.
So, what action must you now take as an employer in Wales?
Take legal advice about whether the legislation applies to the accommodation you provide as the legislation is fact based.
Employers must issue a written statement of the occupation contract. For licence agreements or tenancies already in place on the 1 December 2022 this must be issued by the 1 June 2023. For new service occupancies entered from the 14 December the written statement of service occupation must be provided within 14 days.
Different types of contracts will apply to type of landlord you are. Private landlords must provide a standard contract. Community landlords must provide a secured contract. Community landlords who provide service occupancies have the option to serve notice to their employee to convert the secure contract to a standard contract. For this exception to apply the contract of employment must require the employee to live at the accommodation. An example of this may be a caretaker who lives on site at a college. The benefit of taking this action for the employer is that standard contracts provide less security than secure contracts.
Accommodation providers must register with Rent Smart Wales. You are required to produce an EPC, gas safety certificate and electrical condition report. Accommodation providers must ensure the property is fit for habitation to comply with the Fitness for Human Habitation Regulations. A breach of these regulations will expose you a claim by your employee for disrepair claims.
This article is only for guidance and does not constitute legal advice. If you have a specific legal problem, please contact the Quest advice line on 0333 240 7208.
